METALS-Nickel, zinc rebound; China economy jitters cap gains

Reuters Staff

5 Min Read

(Updates prices)
By Melanie Burton
MELBOURNE, Sept 25 (Reuters) - London zinc and nickel rose
on Monday, rebounding from declines in the previous session, but
price gains were limited as investors remained cautious on the
outlook for the economy in China, the world's top metal
consumer, and for the U.S. dollar.
Investors had been encouraged to cash in profits in a
recently rising metals market after China's economic growth
showed signs of slowing in August, said Dominic Schnider of UBS
Wealth Management in Hong Kong, suggesting any bounce may prove
short-lived.
"I can't get excited (about metals). I'm sorry to say.
Chinese numbers have not really been hinting in the right
direction from a fixed-asset investment point of view. I also
think the market is underpricing the Fed, so the dollar has the
potential to gain some more."
A stronger dollar erodes the purchasing power for metals
buyers paying with other currencies.
FUNDAMENTALS
* COPPER: London Metal Exchange copper traded flat
at $6,458.50 a tonne by 0754 GMT. On Friday, prices fell to
their lowest since Aug. 16 at $6,366. Shanghai Futures Exchange
copper rose 0.8 percent to 50,260 yuan ($7,602)
* NICKEL: LME nickel, which dropped by more than 5
percent on Friday after the ShFE hiked trading fees, recovered
by 1.1 percent. ShFE nickel fell for a second day,
dropping 2.3 percent.
* ZINC: LME zinc rose about 1.5 percent, regaining
most of its losses from Friday.
* INVESTORS: Hedge funds and money managers cut their
net-long position in COMEX copper in the latest week, U.S.
Commodity Futures Trading Commission data showed on Friday.
* CHINA LENDING: China's latest push to revive its bloated
state-owned sector is set to pick up pace this year, with
bankers and investors expecting possible spin-offs and asset
sales to follow a key Communist Party Congress in October.
* S. KOREA JITTERS: Some banks have begun to pare back
credit lines to smaller trading companies holding industrial
metals in South Korea amid escalating tensions over North
Korea's nuclear and missile program, two industry sources said
this week.
* CHINA MINING: China's mining industry will shrink if the
government does not cut it some slack in return for compliance
with strict environmental policies, the head of one of the
country's largest gold miners said on Saturday.
* ZINC M&A: Kazakhstan-focused copper miner Central Asia
Metals said it would buy Bermuda-based Lynx Resources
Ltd, a miner of lead and zinc, in a $402.5 million
reverse-takeover deal from its owners.
* CHINA POLLUTION: Cities in China's eastern province of
Anhui are issuing plans to curb production in the steelmaking,
non-ferrous smelting, cement and coal-fired power sectors over
the coming winter in a drive to meet a politically crucial air
pollution target.
* COMING UP: Germany Ifo business climate Sep at 0800 GMT
PRICES
BASE METALS PRICES 0756 gmt
Three month LME copper 6461.5
Most active ShFE copper 50250
Three month LME aluminium 2144
Most active ShFE 16420
aluminium
Three month LME zinc 3076
Most active ShFE zinc 25180
Three month LME lead 2482.5
Most active ShFE lead 20595
Three month LME nickel 10530
Most active ShFE nickel 84040
Three month LME tin 20540
Most active ShFE tin 145220
BASE METALS ARBITRAGE
LME/SHFE COPPER LMESHFCUc3 346.81
LME/SHFE ALUMINIUM LMESHFALc3 -59.18
LME/SHFE ZINC LMESHFZNc3 889.19
LME/SHFE LEAD LMESHFPBc3 202.49
LME/SHFE NICKEL LMESHFNIc3 1650.43
($1 = 6.6110 Chinese yuan)
(Reporting by Melanie Burton; Editing by Richard Pullin and
Christian Schmollinger)